HomeReal EstateMortgage Rates Dip Below 5% for the First Time in 4 Months

Mortgage Rates Dip Below 5% for the First Time in 4 Months

This week has finally brought some relief for the U.S. homebuyers after months of surging mortgage rates and high prices on the house markets. According to Freddie Mac, the 30-year fixed mortgage dipped to 4.99% this week. This is 0.31% lower than last week and marks the first time in four months that the mortgage rate got below 5%.

Despite the positive signs on the horizon, homebuyers should completely relax. According to Freddie Mac’s chief economist Sam Khater, the current economic situation will continue to provide a fertile ground for mortgage rate volatility. 

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” Khater explained in a statement. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”

While this week’s mortgage rate can seem attractive compared to the June peak of 5.81%, the number is still up 2.22% compared to 2021. This has caused a significant slowdown in home market activity and a drop in sales and mortgage demands.

The cooldown of the U.S. house market is expected to continue in the future as 40-year-high inflation and fears of recessions make Americans cautious of costs related to buying a home.

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